MARTA Cooperative Of America held its first buying group meeting with new executive director Warren Mann at the helm, and the comments from dealers and suppliers were bullish about the year and prospects for the fourth quarter.
Attendees at the show, which was held at the end of last month at the Pointe Hilton Resort in Phoenix, Ariz., were uniformly upbeat about consumer electronics and major appliance sales.
Appliance sales were up across the board, led by room air conditioner sales. The latter will provide fresh cash for dealers to buy consumer electronics for the fall, which will come in handy with some concerned about shortages in such key categories as DVD and color TVs of all sizes.
Mann, who was on the job for about a month when the show began, said that business has been good for the group this year. MARTA represents about 125 dealers across the country who generate $2.5 billion in retail sales annually - about two-thirds in appliances and one-third in consumer electronics, "with some furniture sales too," Mann said.
Starting with appliances, Mann said, "AHAM is reporting an 8% increase in sales this year. Our guys are doing equally well." Room air conditioner sales "have been good for most of our members this year." In addition, he pointed out a positive, "counter-cyclical trend. strong freezer sales, which usually happens when the economy is down and consumers are unhappy."
Steve Loar of Grove Refrigeration, Alliance, Ohio, made a similar assessment of the appliance business. "Laundry and range sales have been strong this summer. Usually it isn't."
Electronics "has a lot going for it to make sales go up," Mann said, with strong sales in DVD, projection TVs and big-screen models. The only problem with DVD is that "at $299, it's great for consumers, but hurts margins."
Part of Mann's growth strategy is to go from a three-times-a-year show program, usually held in February, around May/ June and August/September, to more of an ongoing plan. "The shows are fine. After all, our shows are as close to trade events for white goods in the industry. But we are going to try to stretch out our programs where we can. We are better served with large, annual programs."
Elmer Karl, president of Karl's of Gregory, S.D., and MARTA president, commented that major appliance sales were up across the board. "Our business is up over 20% this year. For the group, it's different in every market, but it is up." As for air conditioners, "sales have gone through the roof."
In consumer electronics, Karl said, "strong sales should continue, if vendors support us," hinting at concerns about product shortages. "DVD, big-screen TV and projection TV sales have been good."
Itchy Popkin, Furniture Fair of Jacksonville, N.C., and John Mistak, Walter's Home Appliance of Detroit, both of whom won MARTA awards at the show, were both bullish about market conditions.
"Brown goods have been strong all year," said Popkin. "The air conditioner business has been great for us. We are completely sold out. We think that business will be good through the first half of 2000. There are lots of new homes being built, and we don't see a slowdown."
Mistak, meanwhile, echoed concerns about DVD availability saying, "Sales have been good, if you can get product." When asked about e-commerce, he commented, "Consumers are turning to the web for reference and information. We have a site, but we use it for information."
Loar of Grove Refrigeration said his company uses the web "to provide information only" at this point. In terms of market conditions, he noted, "Consumers are past the initial fear about HDTV. They have been buying plenty of big-screen TVs this summer. DVD sales have been strong, but my only concern [in electronics] is fourth-quarter shortages. If we have problems now on certain models, what about later on?"
Manufacturers at the MARTA meeting agreed with many of the retailers' assessments.
Keith Ido, JVC's buying groups VP, said, "Everyone is very optimistic about the fourth quarter. There are concerns about DVD shortages. As far as JVC is concerned, we have been asked a lot about our DTV, projection TV and digital camcorder plans at this and other buying group meetings." However, JVC has not yet announced fourth-quarter plans on those products, he said.
Mike Bride, account manager/buying groups for Amana, said, "Like everyone else, we are very happy with the shot in the arm air conditioner sales have given us this summer."